MNI Press Digest Feb 2: Liquidity, SLF, China-US

The following lists highlights from Chinese press reports on Tuesday:

• The PBOC should increase liquidity injections to help meet shortages of around CNY1.85 trillion before the mid-February Chinese New Year, the China Securities Journal reported citing Ming Ming from CITIC Securities. The PBOC's CNY98 billion injection on Monday lowered interbank funding rates and rallied both the stock and bond markets, wrote the newspaper. Liquidity is not excessive despite easing measures, the newspaper reported citing Zhao Wei from KaiYuan Securities.
• The PBOC conducted the highest monthly SLF injections in a year in January, totaling CNY37.67 billion, according to official data released on Monday. The SLFs included CNY11 billion overnight, CNY21.5 billion 7-day and CNY5.17 billion 1-month injections. The SLF rates gauge the upper limit of the interest rate corridor, and are conducive to smoothing the money market interest rates, the PBOC said in a statement on its website. Borrowing costs on overnight, 7-day and 1-month loans are 3.05%, 3.2% and 3.55%, respectively, it said. The PBOC has denied market rumors about a potential SLF rate hike and notified law enforcement of the rumors last week, MNI noted.
• China should not yield on contentious issues such as Taiwan despite sending positive signals of cooperation on issues including pandemic containment, policy coordination and climate policy, the Global Times reported citing Lv Xiang, an expert in US studies with the Chinese Academy of Social Sciences in Beijing. China's cooperation with the Biden administration will only be possible if the new administration focuses on fixing bilateral ties, wrote the newspaper. Biden should avoid the influence of domestic conservative forces and seize opportunities to stop the country from declining further, the newspaper wrote citing Chinese experts.